Tips to avoid a real estate lemon

The house looks great both outside and inside, there aren't any visible problems and the price is just right. Why then should homeowners still be cautious about moving forward?

Because any property can actually be a real estate lemon. In the same way that buyers want to avoid running into issues with a new car, they should be thorough before closing on a new house. Just to be safe, a home inspection is absolutely crucial during any transaction. A licensed professional can come in and take a look around, finding areas of concern that go deeper than just what's on the surface.

What's more, all homebuyers should perform their own due diligence as well, in order to avoid ending up with a money pit for a new house.

Areas worth taking a look at
In addition to a home inspection, buyers should also look around the house in a few key areas. A lot can be said about a property from some telltale signs, and those could be the difference between ending up with massive repair bills or a dream home.

According to Bankrate.com, the basement should be the first stop during any tour. Why is the location important? Well, it goes beyond storage options. Nearly all valuable components are housed here, including the heating, ventilation and air conditioning units, plumbing and electrical systems. A peek in the basement can say a lot about the entire property.

"When I want to get a quick read on the quality of a house, I head to the basement," Bradley Cruickshank, a contractor and owner of Atlanta-based Cruickshank Remodeling, told the news source. "From the basement, you typically can see the type of construction, quality of materials and evidence of the quality of tradesmen who built it."

The basement shouldn't be the only item on the checklist. Bankrate.com explained that the foundation should be looked at next. Many costly problems can stem from a bad foundation. Trees can't be too close, because roots can spread and cause damage. Any cracks, gaps and water damage inside and out might mean serious concerns with this area.

One easy trick to tell if a house is in good condition is to swing by during bad weather, the news source noted. This may not sound ideal, but heavy rain, wind or snow can say a lot about a structure that bright sunshine can't.

Don't move ahead too quickly
The best way to avoid ending up with a real estate lemon is for homeowners to perform a little research ahead of time. According to Gail Johnson in a blog post for Yahoo Finance, many features - and problems - can be hidden within a house. These might not show up during a tour, so it pays off to be thorough and dig deeper.

In addition, a property inspection is also vital because a professional can look beyond the house itself. Issues outside, like dead, overgrown trees, a dilapidated shed or a falling-down fence can all equal major repair bills after moving in.

Overall, homebuyers have to keep an eye out for any past renovations, Johnson explained. A lot of cosmetic fixes can distract from more serious problems, or simply hide them. Therefore, smart shoppers understand where the real issues are, and what questions have to be asked to avoid ending up with a money pit.